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Saudi underperforms Gulf as Fed decision hits banks

Reuters , Sunday 20 Sep 2015
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Gulf stock markets were mixed on Sunday, responding to weaker oil prices and the decision by the U.S. Federal Reserve to leave interest rates unchanged.

Egypt's market suffered after its central bank also kept rates on hold.

Saudi Arabia's stock index fell 1.4 percent, with local banks hit by the Fed's decision on Thursday not to raise interest rates.

The banking sector index dropped 2.2 percent.

Some investors had hoped that higher U.S. interest rates would boost the margins of Saudi Arabian banks as their deposits are largely interest free.

In other sectors, United Cooperative Assurance  tumbled 4.5 percent after the company said on Sunday it had received a claim from Saudi Binladin Group over the collapse of
a crane this month at the Grand Mosque in Mecca that killed more than 100 people.

The firm said it had appointed evaluators to determine the damage caused by the accident, adding its client's policy was more than 98 percent covered by reinsurers.

Saudi Arabia's market will be closed from Tuesday and most markets in the Middle East will close from Wednesday for the Muslim holiday of Eid al-Adha, so investors may be reluctant to  open new positions ahead of the extended break.

Dubai's index was nearly flat in mixed trade.

Budget carrier Air Arabia, which could benefit from cheaper fuel, was among the gainers and rose 1.4 percent after oil prices dropped again on Friday.

Abu Dhabi's benchmark added 0.6 percent with most blue chips positive, although Abu Dhabi National Energy Co, sensitive to oil prices, tumbled 8.9 percent.

Qatar's market fell 0.6 percent and petrochemicals giant Industries Qatar lost 1.0 percent.

Egypt's market edged down 0.5 percent with most stocks in the red after the country's central bank kept its rates on hold, despite some investors' hopes for a cut.

Telecom Egypt dropped 3.2 percent after its chairman Mohamed Salem resigned, having served for just four months.

Property developer SODIC, however, rose 1.0 percent after being awarded a plot of about 31 acres on the outskirts of Cairo.

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